Accounting Ethics

Accounting Ethics

Introduction

Business ethics is the set of values, norms and principles reflected in the culture of the company to achieve greater harmony. Business ethics is defined as the code of conduct which allows better adaptation to all environments in terms of respecting the rights recognized by society, community and the law making bodies. Ethics in business is implemented to ensure the rights of investors and stakeholders. However, some companies and business personals breach these principles and commit frauds (Jeffrey, 2010).

Discussion

Corporate Ethical Breaches

Companies commit ethical breaches with an intention of doing it. There are a number of ethical breaches which reflects the business performance and the current environment. From American to Indian there are a number of companies such as Enron, WorldCom and a large list. These ethical scandals highlight the implementation and development of effective ethical principles and policies. Even Enron was the world largest Oil and Natural gas Company and just before its failure the company was rewarded as the best company (Kienzler, 2003).

Conductive to Ethical Behavior

After a number of corporate failures the regulatory bodies came on front and define policies and principles which the corporate have to follow. In current business environment the regulatory environment becomes more conductive and efficient as compared to the olden days. In today's business world financial analysts and regulators from the Government define new ethical codes. These ethical codes are implemented as a necessary practice and companies registered in the stock market have to comply these principles. According to the Regulatory Affairs Professionals Society (RAPS) and Confidential Financial Disclosure Report OGE - 450 from United States implementation of Ethics in corporations is implemented in order to save the investors and stakeholders interest. These codes are defined in the best interest of Investors and the government (John, 2009).

After the Enron failure in 2001 in which the investors loose more than a billion dollar and government had to face a number of problems, a solution is therefore required. According to AAMFT Ethics Committee the Code of Ethics are applied from July 1, 2012 it is bided upon all to follow them and in case of any breach from these principles, the company had to face some serious consequences.

Organization & Ethical Breach

For the perspective of research the corporate failure case of Enron is selected. Enron was regarded as one of the top ten companies in the oil and gas Sector before 2001. The company is involved in serious ethical breaches. Out of a number of unethical practices the most highlighted one is that the company join hands with the Auditors (Arthur & Anderson) intentionally commits misrepresentations in the financial statements. The company shows huge amounts of profits and hides the original picture of the financial records for the purpose of attracting more and more money from the investors. On the other hand, the company also invades its taxes with the help of auditors (Fox, 2002).

How issue was detected The ethical issue in Enron is hard to detect and identify ...